Business Credit Cards

The small business sector is doing  just fine in terms of credit card financing. There was a study done by Key bridge research and they concluded that the number #1 source for small business finance is credit card borrowing. Business credit is a vital for any small business to survive and very important to the U.S. economy for job growth. Below are some key points from the research report. I've highlighted some key points that I thought were most important.

- According to a 2010 National Federation of Independent Businesses survey, for example, only one third of small business credit line applicants receive an offer with what they consider to be satisfactory terms and conditions, and only 39% of bank loan requests from small firms are granted. On the other hand, three quarters of all small businesses are successful in obtaining business credit card credit.

 - Also, a 2009 National Small Business Association survey revealed that 59% of small businesses use credit cards to meet their capital needs, and more than one-third of small businesses obtain 25% or more of their overall debt financing from credit cards.

- There is strong statistical evidence that small business credit card lending facilitates growth in employment and revenue at small firms. Each one percent (or $31 per month, in 2003 dollars) increase in business credit card credit used by small firms is associated with a 0.051% increase in firm employment and a 0.144% ($2,020 on average) increase in firm revenue. These findings suggest that the average small firm creates one net new job for each $5,613 increase in credit card use per month

.- Based on these findings, it is estimated that the expansion of credit card lending to small businesses from 2003 to 2008 contributed to the creation of 1.6 million U.S. jobs, including a direct contribution to the creation of 592,000 small business jobs, and an indirect or induced contribution to the creation of an additional 1.0 million jobs throughout the U.S. economy.

- It is also estimated that the increase in credit card lending to small businesses from 2003 to 2008 resulted in a cumulative increase in the value added of the U.S. economy of $142 billion. On an annual basis small business use of business credit cards therefore contributed roughly one quarter percentage point of total U.S. value added or GDP.

- There is also a positive and statistically significant relationship between ―start-up‖ small businesses use of business credit cards and firm revenue growth. Each one percent increase in credit card credit use by start-up businesses is associated with a 0.116% increase in firm revenue. This means that, on average, an extra $1,000 of credit card use would be associated with about a $5,500 increase in firm revenue.

As you can see from this study, small business credit card lending is great for the U.S. economy. Small business owners who are able to build a solid business credit file will be able to obtain financing via business credit cards.

Al,
Business Credit Consultant
https://twitter.com/ALPLOUISEA
alplouis@gmail.com 

Click on the link below to get your copy of the business credit e-book.
http://www.tradebit.com/filedetail.php/126427810

Video link
http://www.youtube.com/user/alplouis?feature=results_main